From 29 July 2013, s.111A Employment Rights Act (ERA) 1996 introduces the principle of “confidential negotiations before termination of employment”, known as Protected Conversations.
This is a tool that will allow employers to have a discussion with an employee that they wish to dismiss without the content of this conversation being raised in an unfair dismissal claim and to allow negotiations between the parties to take place.
s.111A ERA 1996 provides the protection for these ‘pre-termination negotiations’ as long as they satisfy certain requirements and meet the definition under the law, being that:
- The protection only relates to an offer made or a discussion held;
- The protection only applies before the termination of the employment in questions;
- The conversation must be held with a view to the employment being terminated on the terms agreed between the employer and the employee;
- The protection only applies to unfair dismissal claims;
- The protection does not apply where the Tribunal believes that there has been improper behaviour or conduct by the employer.
For this protection to be achieved these issues need to be considered in turn:
Offer Made or Discussion Held
This will be a discussion occurring either between the parties face to face, or by email or on the telephone. For there to be reduced ambiguity about this the employer and the employee can mark their correspondence ‘Without Prejudice’ so that they understand that this is designed to be confidential or ensure that each conversation is started with these words.
Before the Termination of the Employment
The protection under s.111A ERA 1996 does not extend to post-termination negotiations. The employer will not be able to rely on this protection when they attempt to negotiate the settlement of a potential claim. The theory behind the protected conversations is to allow the parties to negotiate an exit package without resorting to litigation.
With a view to the Employment Being Terminated
The key aspect of this part of s.111A ERA 1996 is to ensure that the protection only extends to negotiations prior to the end of an employment relationship. The protection will lead in to the parties engaging in a Settlement Agreement which will bind the parties to a compromise. Settlement Agreements are the only legal method of an employee limiting their statutory rights to bring an employment claim (unless they have employee owner status and have already agreed to limit their statutory rights).
The previous law on Settlement Agreements only provided protection once the Settlement Agreement was signed. The addition of s.111A ERA 1996 now provides protection for the discussions up to and including the signing of the agreement and whether the legal requirements for these agreements have been adhered to or not.
Only Applies to Unfair Dismissal Claims
The protection does not apply to discrimination, harassment, whistleblowing, wrongful dismissal etc, only unfair dismissal claims. It is worth noting that unfair dismissal claims are usually made alongside other claims. So even if the protection is applicable to the pre-termination negotiations then this will only be protected for the unfair dismissal. For all other parts of the matter, the conversation will not receive any protection, but will be disregarded for the purposes of deciding the fairness of the dismissal.
This protection will only apply in normal unfair dismissal claims and does not apply to ‘automatically unfair dismissals’. An automatically unfair dismissal is where termination is based on a reason that can have no justification. For example, dismissing someone because they are pregnant or disabled cannot be justified and so would be automatically unfair. Any pre-termination negotiations in this instance will still be admissible as evidence.
Whilst this may seem like a limited protection, the compensation that is awarded in the Employment Tribunal often flows from the fairness of the dismissal, loss of earnings for example would only be claimed where there has been an unfair dismissal. The protected conversation could potentially mean the difference between an unfair and a fair dismissal, especially where the employee leaves their employment and claims constructive unfair dismissal.
The Protection does not apply where there has been Improper Behaviour or Conduct
s.111A ERA 1996 does not actually include any definition of what could be described as “improper”. To a certain extent this is a matter of common sense and any oppression or force or bullying would count against an employer.
ACAS have produced guidance and contained in this is a list of what could be counted as improper, but this will not represent an exhaustive list:
- Physical violence
- Aggressive behaviour
- Undue Pressure including:
- Not allowing a 7 day “cooling off period” for the employee to consider the offer.
- Whilst the employee is considering the offer, reducing the amount offered.
- Telling an employee that if they reject the offer they will be dismissed.
Bearing in mind that this law is very new, there is likely to be a lot of disagreement between employers and employees about what the actual interpretation of s.111A ERA 1996 will be. The actual extent to which employers will be protected in pre-termination negotiations has yet to be seen. For example, what one party considers to be improper the other may not. There will need to be careful consideration of these types of conversations before they are entered into as the ramifications for employers could be that they make an admission which gives rise to an unfair dismissal claim which is not then protected.